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Foreign Aid Increasingly Irrelevant as Poverty Continues to be Tolerated Say Foreign Aid Analysts from North and South

News Release

Embargo: Tuesday March 19, 2002

Foreign Aid Increasingly Irrelevant as Poverty Continues to be Tolerated Say Foreign Aid Analysts from North and South

"Aid alone, in the absence of leadership to restructure global financial, trade and environmental relations, will never achieve the goal of poverty eradication" concludes Reality of Aid 2002, released today internationally. More than 35 Reality of Aid writers and analysts, representing non-governmental organizations from both donor countries (including Canada) and recipients in Asia, Africa and the Americas, depict a profoundly disturbing assessment of the actual impact of foreign aid to meeting human needs.

Reality of Aid 2002 states that without changes to the World Bank and International Financial Institutions, the cancellation of all debt for the poorest countries, a commitment to reaching the United Nations target of 0.7% of GNP to aid and a fundamental change to aid procedures and practices "foreign aid will be seen as increasingly irrelevant—just part of an established order that tolerates poverty."

Aid spending declined precipitously in the 1990s with donor countries pointing to an urgent need to cut budget deficits. But according to Reality of Aid, the people living in greatest poverty in the world were having to pay the price of getting rich countries’ economies in order. "The total failure of the majority of rich countries to honour the commitments they have made to increase aid towards 0.7%… contrasts sharply with the growing wealth of OECD countries [this disparity] can be summed up simply in the phrase ‘richer but meaner’."

What aid spending there is, is skewed by donor interests away from the poorest and towards middle-income countries and emerging markets. The world’s Least Developed Countries, including Sierra Leone, Niger, Mali and Burkina Faso, have seen aid per person decline by more than half throughout the 1990s and although G-8 leaders, meeting in Kananaskis later this year, have made Africa a priority, aid to Sub-Saharan Africa over the last four years has been lower than any year since 1984. What makes this picture even more troubling is that less than half of this declining aid, because of the way aid is managed and accounted for, is under local control. According to the report, "A lot of aid in practice is spent within the donor country – for instance funding consultants under technical cooperation and paying for refugees in donor countries and imputed student costs."

As North-South transfers decline, Northern-dominated global institutions are consolidating a system of highly unequal relations between countries. Twenty-four developed countries control more than 70% of the voting power within the World Bank, and the International Monetary Fund has attached an average of 114 conditions to loans to countries in Sub-Saharan Africa in 1999 alone. "These conditions," according to Reality of Aid, "not only advance the commercial, political and diplomatic interests of the North, they often deepen poverty and inequality." As Gerry Barr President and CEO of the Canadian Council for International Co-operation says, "There is a global tide running against development initiatives as multilateral institutions re-enforce the marginalization and the continued impoverishment of two-thirds of the world’s population."

As Reality of Aid is being released just prior to the United Nations Financing for Development meeting in Monterrey Mexico, the NGOs in the Reality of Aid network are calling on heads of government in Monterrey to commit new resources to foreign aid and to take specific steps to move away from conditionality and towards a partnership with the South that will ensure real global progress on human rights and poverty reduction.


Reality of Aid is an independent semi-annual review of OECD development assistance. The project involves more than 35 non-governmental organizations throughout the world. Brian Tomlinson of the Canadian Council for International Co-operation is on the Reality of Aid editorial committee and was the author of the Canadian Chapter. Brian Tomlinson and CCIC President and CEO Gerry Barr are available for interviews.

For more information contact:

Katia Gianneschi
Media Relations
Canadian Council for International Co-operation
(613) 241-7007 ext. 311


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